Blinky the 3-eyed Fish

One interesting note is that options to buy shares count for owneship purpoes for the PBGC. I haven't thought about it but like other attribution rules I suppose it would be possible to have more than 2 50% owners. I'm not suggesting a bogus arrangement though.

the incluble contribution rules apply to this exact situation. i have posted on this before so do a search. if the ffl is no a limiting factor you should have no issue deducting the contribution missed. this keyboard i am typing on stinks.

WOW! And I thought I was being nice.

15 or 16 Andy? If 55/16 is indeed the NRA, then he would have 16 years at NRA. This of course is not a safe harbor design.

All I am pointing out is the dichotomous nature of your remarks. Your fiesty comments indicate you probably do appreciate your employees and provide well for them, although the sentiment of the post I challenged was different. With your benevolence you think that the a pension plan just for you is appropriate. The Internal Revenue Code says differently. I don't know you, you don't know me. Let's move on with our lives. Report back what you find and we will all discuss it. You will make an informed decision. It will probably be a good one. You will be happy you did it and the happiness will show to your customers who will refer you to others. You will become richer, get a little pot belly and keel over in your bean salad old and content.

I see, but -7(b) is where you get to the results SoCal and I mentioned with the testing date as the last day of the plan year.

Acknowledge their value to you and your business then and that may cease your qualms about providing for their retirement too.

It satisfies 401(a)(26). What cite are you looking at that says it has to be satisfied each day of the plan year? I assure you annual testing is permitted.

Joey, with that sort of logic, I would like to see how far your business gets with only you working for it. The reality is that you are making money on the backs of your employees or you wouldn't have them. I now question how well your employees are treated with that thinking.

You are testing the nonelective portion of the plan, so it is clear that for rate groups compensation from date of entry for the nonelective piece satisfies 414(s). The average benefits test is just an extension of the general testing of the nonelective piece even though all money sources are considered, so the same compensation rules apply.

Thanks and may your brain be repaired post haste. As for who to write, just mail it out To Whom It May Concern and hope for the best.

I wanted to revive this post. Tom I was agreeing with you before that the QNEC satisfies the gateway, but then the (a)(4) testing then must be done with and without it. However, it appears TBob's last post went unrefuted when he stated the QNEC would not satisfy the gateway. So it's a year later. Care to clarify Tom or offer any updated knowledge?

415(b)(1)(B) limits a DB participant's benefit to their highest 3 consecutive years of compensation. The 1.0273 factor means that a retiree/terminee can have their Hi-3 increased by that amount if the plan allows. For example: A person retires in 2004 and receives a benefit equal to is Hi-3. In 2005 he would now be able to receive his Hi-3 multiplied by 1.0273. The dollar limit of $170,000 is a different limitation unaffected by this adjustment.

George, can I reinstate that shark post and attribute the reason I posted it was to "yank your chain"?

SoCal, I am glad you understood No Name. That makes sense but still brings us back to the potential PT, and in case of audit it dilutes the paper trail showing the repayment to the ER. Mbozek, true, although the path of least resistence may be to call it a PT, or maybe it's not even a PT.

The PT may result if the plan reimbursed the ER in a manner than is outside of PTE 80-26. If the ER wanted to eat it, then of course, no PT.

Mbozek, could you explain why they would do that? Worst case is that it is a prohibited transaction and the excise tax is a fraction of the effective double payment you propose. Also, if the distribution was taken as cash, 20% was withheld for taxes as plan withholding. Treating the payment as W-2 would send that tax payment off to Neverneverland for awhile until it could be recovered with a 945 filing. If the payment was rolled over, well then treating it as W-2 would negate the rollover ability and cause all kinds of confusion.

Lori, if this was a DB plan you would have pro ration issues as outlined in Rev. Rul. 79-237.

No Name, I don't understand your post. Call the payment a contribution? Isn't that like calling a distribution a contribution. You must mean something else. Care to explain?

Is this a DB or DC plan?

What you have in effect is a loan from the employer to the plan. This may be covered under PTE 80-26 depending on the details. Barring any document provisions that prevent it, the plan should reimburse the employer. The 1099 should report the distribution as from the plan. As of the date of the distribution the plan should accrue the liability of the distribution amount and report it accordingly on the 5500, etal.

This piqued my curiousity so I did a little digging. I think the issue can be summarized as to whether or not you take the total outstanding loan balance at any one time within the last 12 months or if you take the highest outstanding balance of each loan within the last 12 months. The first method would yield a result of $40,000 in this example, leaving a $10,000 available loan and 3 subsequent available loans at $10,000 a pop. The second method would yield a result of $50,000 and no available loans after the first $10,000 one issued. Sal has a good discussion on page 7.187 of the 2004 ERISA Outline Book and espouses that the literal reading of the stature is the first method. That can't be the intent of the statute, but intent schmintent.

Jay, c'mon now. Think of a DB PVAB as the equivalent to a DC account balance. Each is representative of what the participant would get from the plan in a lump sum. Would you get to reduce the value of the account balance in a DC plan? Of course not. The same logical concept applies here. SoCal answered the question in his first post.

Isn't that 6 in one hand 1/2 dozen in the other?

I don't understand the first question, you are showing contributions on a Sch B, not premiums, per se, and of course you would never show estimated amounts. To the second question, as indicated in the prior posts, I would definitely NOT revise the NC numbers.